China is the world's leading producer of rare earth metals.What will happen to the value of the yuan if demand for rare earth metals increases and the government does not intervene?

Question

Quizplus · Accepted Answer

An increase in demand for rare earth metals will result in an increase in exports of these metals from China, therefore, increasing the demand for yuan in exchange for these exports. As a result, the value of the yuan is likely to appreciate if the government does not intervene in the foreign exchange market.

China Is the World's Leading Producer of Rare Earth Metals